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 H.B.M.C. wrote:

How else do you explain the scattershot way they recently gave out the 40K license to any two-bit mobile developer? A lot of money in licensing fees for no effort.

Actually, the most recent release on the App Store is Horus Heresy: Drop Assault. The GW and Warhammer 40k placards are stamped at the bottom of the screen, but the trademarked title and logos are Horus Heresy. It makes me wonder if Black Library is getting into licensing as well.

I haven't played much of it, but it seems Clash-of-Clans-esque. You choose between Loyalist vs. Traitor to play out the scenario on Istvaan III. Once you chose a faction, then you get to choose between one of four chapters. I'm playing as the white/green Death Guard.

Of course, it has the trend of all new App games that you download for free - wait to build/recruit, or spend money for "machine spirit" tokens that speed everything up.

The key change happened when the LOTR boom popped and GW's revenue tanked. When that happened, they actually did the right thing in terms of restructuring. They cut unnecessary staff and reorganized things to return to profitability.

It's what happened next that was the problem. There was a change in business model that grew out of the restructuring. They became addicted to the margins and earnings per share that massive cost cuts and price hikes brought them. If you look at the historical earnings per share, the period after the restructuring is even higher than the height of the LOTR boom. For a brief period, GW really was the efficient cash generation machine Kirby bragged about in the last report.

The new approach to the business was to go for reduced sales volume at higher prices. This allows GW to sell less product at a higher price, but then save money on manufacturing, distributing and selling the product (as it simply costs less to make less and ship fewer boxes).

The problem is that it's the only play in their playbook now. All they have is "fire people to save money and raise prices!" And there is no plan to return to growth. Outside of the mind-boggling renovation of the "visitor centre" GW only reinvests in their own business to save money and not to grow their volume.

In fact, they are investing in actively reducing their volume by switching their stores to have less staff and be open less hours. Those in the know have reported it works out to about a 40% reduction in sales for a store when it switches from fully staffed to a single employee location. But if it saves them more than 40% in staff costs and rental costs (moving to a smaller location) then they think it's worth spending the money on the transition.

The problem is that less open hours and intentionally selling less product to less people is that recruitment is down. Which means there's less word of mouth. Less people telling their friends about the hobby and inviting them to come down on Saturday to check it out. Less people showing curious friends and family their painted miniatures. Less of everything.

And wargaming is fundamentally a social hobby. So when you have a reduction in the number of participants you can have a local area fail to maintain a critical mass and all the local talk, excitement and buzz fades away. Less organized gaming and painting events. Less talk about who's going to buy the latest new army. Less of everything.

During GW's greatest era of growth from a UK importer of games like D&D into an international miniatures company, GW concentrated on getting their games into as many hands as possible. When LOTR came out, they wanted as many people as possible to know about their games. They even commissioned a marketing magazine by the DiAgostini media group called Battle Games in Middle Earth. Yes, they actually paid a third party company to do actual marketing for them in the form of a promotional magazine available at news agents, grocery stores and the like (incidentally Disney has hired this same company to make a Star Wars magazine to hype the new movie coming out).

Now they no longer prioritize getting their product into as many hands as possible. They actually welcome declining volume because they can use the cost savings to make their margins look good and to justify paying out cash reserves as dividends. They are happy to sell less product at a higher price and save on costs.

This report though, shows a failure to keep costs going down. Revenue is down, but costs are slightly up. That's not good. It shows that the revenue is falling faster than their ability to cut jobs, close stores and save on lower volumes of production. They just finished another round of restructuring with massive layoffs in the administration side of things that was supposed to save them money going forward.

As an aside, there is also something contradictory about injection moulded plastic and their intentional reduction of sales volume. Injection moulded plastic requires a high up front cost in terms of design and tooling for the mould but has an incredibly low cost per sprue you pump out. So it's a manufacturing process that gives you the best results when you mass produce. Doing premium pricing and intentionally reducing volume by cutting staff and hours means you'll sell fewer sprues. So you have the way GW makes the stuff geared towards mass production and the way they sell it to be geared towards premium products sold in fewer numbers at higher prices. Their high price, low volume approach is actively denying them the advantages that their manufacturing process should be providing them.

And all of this doesn't even deal with a potential mismatch with the desires of the market. GW believes they have discovered a niche group of customers that are primarily collectors who see their miniatures as "jewel like objects of magic and wonder" (as Kirby put it in a previous report). Emails from their investor relations department confirm that they really don't think solid game play is a priority for their customers. They don't seem to think it's about the games, but is actually about the collection of miniatures. And Kirby even bragged about market research being unnecessary in this niche. It's entirely possible that there are weaknesses in their product experience that no one at GW is willing to address. That elements of the complete package approach GW offers isn't really what the market wants and that their chosen niche may not be sufficiently large to justify catering just to them and ignoring those who have other priorities.

At this point GW shouldn't be blaming their own staff and saying that "continuing to grow" is going to depend on their sales managers ability to sell. They should be talking about what plan they have to stop the shrinking revenue and volume. What plan they have to return to growth. The thing is though, such a plan doesn't seem to exist. They seem oddly proud of their failing cash machine that isn't keeping the earnings per share up high enough to sustain the dividends of the last while.

The scariest prospect for GW is the possibility that Kirby and friends are right. That they made the right move by abandoning volume and growth and going after premium pricing and cutting costs. That GW really did hit their peak and nothing could have been done differently and all that's left is to manage the decline into irrelevancy in the larger market. That there's some sort of demographic or cultural shift that makes their products less appealing to the young that is their traditional target market so they have nothing left but to jack up prices and try to squeeze as much cash out of their brands before they shrink even further.

 frozenwastes wrote:
.....
The scariest prospect for GW is the possibility that Kirby and friends are right. That they made the right move by abandoning volume and growth and going after premium pricing and cutting costs. That GW really did hit their peak and nothing could have been done differently and all that's left is to manage the decline into irrelevancy in the larger market. That there's some sort of demographic or cultural shift that makes their products less appealing to the young that is their traditional target market so they have nothing left but to jack up prices and try to squeeze as much cash out of their brands before they shrink even further.

I agree with the above, but what is scariest to me is that they have no way of knowing because they don't care about market research. Kirby sits in front of his computer once a year and writes a page or two of barking mad and that's their source of market information. "Nothing left to do but jack up prices" seems to have been their number one plan, and their fallback plan. How can a business grow when they don't know what made them successful in the first place?

edit: i always like to trot out that quote from kirby's 2006 preamble, where he talks about how the business revolves around ocd males. It was and still is the perfect indicator of the fundamental flaws in his perception of their business. There are ocd people in the world (usually male) and some of them like buying miniatures. From a company that used to have a diverse range of games. Its a serious case of: well, ****.

@frozenwastes - nice analysis and history lesson

Perhaps my only disagreement with you is in the injection molded plastic. The main reason I love GW models above all others (particularly large ones) is that they are injection molded plastic. They are very consistent, easy to work with, and always fit well.

It's funny, because for nostalgic reasons, I always say I love metal models. However, all it takes is for me to work with a large one, to turn around and hate them all over again.

As an example, for Christmas, my wife gave me a large metal GW model made from yesteryear (a dragon). It's going to take me ten hours just to *assemble* it. A whole tube of milliput, probably, and God only knows how many sanding sticks and wire brushes (to clean out my files) it's going to take.

Other than fit and ease of material, GW MPP is very nice because there are many gearing options, and I am addicted to the bits. The surface is also ideal for painting. Plus, the subassemblies are often far more complex than metal or resin models (look at Nagash or Treeman), allowing more realistic models than an extruded piece of metal (where everything behind an object, like a tabard, is just solid). With either resin or metal, it's not possible to have web-like piece where you can see through, for example, the floor of a vehicle, or chains on a tabbard, for the model component behind/beneath.

Anyhow, TLDR -- I would pay (significantly) more for good, injection molded plastic, over either resin or metal models, even though I perceive metal as more valuable.

Talys wrote:

 Psychopomp wrote:

Okay, this is still old GW-style thinking.

First, number 2: The lack of churn means it will take a much longer time for that product to become outdated, if ever. And with historicals, it never will.

Now, number 1:

GW product sells constantly with almost no effort beyond stocking and being a curator for the merchandise because GW is modelling their strategy to keeping up their own retail chain, which sells their crap exclusively. GW needs it to work like that to support their stores - which are actually competition for the independent FLGS. That's what the GW treadmill is all about.

PP and almost every other wargame manufacturer out there focuses on producing a stable product with lasting quality of experience over time. They make a product people want, and they make it so that people keep playing it. So the customers buy, and then - assuming playing space - they come to the store to play there. They get people into the store. Once the players / prospective customers are in the store, IT IS THE STORE MANAGER'S JOB TO SELL THEM STUFF, NOT THE MANUFACTURER'S.

In the example given with the regular WM/H crowd and the dusty WM/H product in stock, what has the store done to sell the product? Have they run leagues? Because they can download the rules packet from PP's website free of charge. They can even order a prize packet for the season leagues or even a starter league. Same thing with tournaments - download the rules, maybe order the prize packet. Have they run demos than advertised them to people other than the regular players (ie, the people who have already bought the game)? Have they told people to come to the usual WM/H night and check out the game? Have they asked any of the regulars for ideas? Have they done anything but stock the product and wait for the same people to keep buying the same game over and over and over? Because only GW product sells like that, because GW's release strategy forces you to subscribe to their games, not buy them. Other wargames sell like other games, where you buy in and can be done. It requires effort on the part of the store, because the manufacturer of these other games aren't tailoring them to support an entire chain of stores supported by artificial product churn.

That's the new paradigm for wargaming in stores. Stock starter sets and common upgrades, and drum up your own damned sales, because the companies making them are focused on production, not retailing...which is good, because it means there won't be a PP store opening in your neighborhood to steal your gamers! Luckily, PP and other companies, by focusing on solid product and game support give retailers plenty of tools for drumming up their own damned sales, but it does require a little effort on the stores' part.

Sure thing, call it what you will. If those stores would just ratchet up Lumia, Windows Phone would outsell iPhone! This is terrible logic. If you want to shout: IT IS NOT SOLEY THE INDIVIDUAL STORE'S RESPONSIBILITY TO DRUM UP SALES!!

It is the manufacturer's responsibility to create hype, and create churn. Stores are staffed by low wage earners who aren't the best sales people in the universe. If they were, they'd work for pharmaceutical companies, make six figure salaries, and have company cars and expense accounts. The only person in the store that makes a lot of money is the store owner.

When Microsoft writes Halo, is it Best Buy's job to walk up to everyone and say, "BUY HALO! HALO IS GOOD!"? How about when Xbox One or PS4 are released? Who's job is it to promote it? Who puts up the TV ads? It's squarely on the manufacturer to create hype, because they have the budget to do so. Little wee stores have enough problems, like paying rent, dealing with theft, and making ends meet.

The fact is (and it really is a fact in my area if nowhere else), the WMH crowd buys a lot less stuff (including hobby supplies) per player than the 40k crowd, and the XWing player buys even less. The infinity player, and malifaux players buy little bits of stuff too. That's why when you walk into a store, the front 1/4 of the store is all GW stuff. It sells. Among other things, one problem with WMH being "stable" or whatever you want to call it, there is really nothing left to buy for people who have all their gaming pieces for two or three factions. The new releases are so sparse, in comparison.

If the new paradigm of wargaming stores is what you purport it to be, local stores are doomed.

By the way, you're wrong about untis being outdated. On Boxing Day, nobody bought a Hordes starter box with metal models (old box) marked down to $45. Nobody bought a Trollbloods Scattergunner, with metal models, marked down to $25. Store owner offered them to me for five bucks less than that the next week, but I couldn't bring myself to pull the trigger, because they'd sit in the box for another 10 years before I finally gave them away. There were tons (and I mean *tons*) of PP metal blisters marked down way below half price that people passed on. Yet, at the end of it all, every single playable 40k model (well-discounted) was sold. I'm talking, every drop pod, every Rhino, predator, Hydra, troops of every faction, box sets, Tyrants, stormravens, and even most of the factioned terminators. The only stuff left was junk that has no value other than for modelling, and terrain/fortification, which never sells well.


Automatically Appended Next Post:

 puma713 wrote:
So, who do we have to blame for the downfall of our beloved company? I know that Kirby and his cronies are the ones that are driving it into the ground, but who put him in power? Who originally went public with the company? Kirby is just doing what greedy worms do. Who should I direct my ire towards, really?

I do believe that GW becoming a public company was bad for both the players and the game (but probably great, financially, for the founders).

And what you're not getting as the WM/H, Malifaux and X-Wing player is usually the same person. So, while they're not being forced to buy stuff by artificial meta churn like GW's crap, they're putting their money in the store just the same. Just this year I bought into WMH, Infinity, X-wing and now Maliefaux. Yeah, not a dollar went to GW, but it did go to the FLGS all the same.

 frozenwastes wrote:
The key change happened when the LOTR boom popped and GW's revenue tanked. When that happened, they actually did the right thing in terms of restructuring. They cut unnecessary staff and reorganized things to return to profitability.

It's what happened next that was the problem. There was a change in business model that grew out of the restructuring. They became addicted to the margins and earnings per share that massive cost cuts and price hikes brought them. If you look at the historical earnings per share, the period after the restructuring is even higher than the height of the LOTR boom. For a brief period, GW really was the efficient cash generation machine Kirby bragged about in the last report.

The new approach to the business was to go for reduced sales volume at higher prices. This allows GW to sell less product at a higher price, but then save money on manufacturing, distributing and selling the product (as it simply costs less to make less and ship fewer boxes).

The problem is that it's the only play in their playbook now. All they have is "fire people to save money and raise prices!" And there is no plan to return to growth. Outside of the mind-boggling renovation of the "visitor centre" GW only reinvests in their own business to save money and not to grow their volume.

In fact, they are investing in actively reducing their volume by switching their stores to have less staff and be open less hours. Those in the know have reported it works out to about a 40% reduction in sales for a store when it switches from fully staffed to a single employee location. But if it saves them more than 40% in staff costs and rental costs (moving to a smaller location) then they think it's worth spending the money on the transition.

Spoiler:

The problem is that less open hours and intentionally selling less product to less people is that recruitment is down. Which means there's less word of mouth. Less people telling their friends about the hobby and inviting them to come down on Saturday to check it out. Less people showing curious friends and family their painted miniatures. Less of everything.

And wargaming is fundamentally a social hobby. So when you have a reduction in the number of participants you can have a local area fail to maintain a critical mass and all the local talk, excitement and buzz fades away. Less organized gaming and painting events. Less talk about who's going to buy the latest new army. Less of everything.

During GW's greatest era of growth from a UK importer of games like D&D into an international miniatures company, GW concentrated on getting their games into as many hands as possible. When LOTR came out, they wanted as many people as possible to know about their games. They even commissioned a marketing magazine by the DiAgostini media group called Battle Games in Middle Earth. Yes, they actually paid a third party company to do actual marketing for them in the form of a promotional magazine available at news agents, grocery stores and the like (incidentally Disney has hired this same company to make a Star Wars magazine to hype the new movie coming out).

Now they no longer prioritize getting their product into as many hands as possible. They actually welcome declining volume because they can use the cost savings to make their margins look good and to justify paying out cash reserves as dividends. They are happy to sell less product at a higher price and save on costs.

This report though, shows a failure to keep costs going down. Revenue is down, but costs are slightly up. That's not good. It shows that the revenue is falling faster than their ability to cut jobs, close stores and save on lower volumes of production. They just finished another round of restructuring with massive layoffs in the administration side of things that was supposed to save them money going forward.

As an aside, there is also something contradictory about injection moulded plastic and their intentional reduction of sales volume. Injection moulded plastic requires a high up front cost in terms of design and tooling for the mould but has an incredibly low cost per sprue you pump out. So it's a manufacturing process that gives you the best results when you mass produce. Doing premium pricing and intentionally reducing volume by cutting staff and hours means you'll sell fewer sprues. So you have the way GW makes the stuff geared towards mass production and the way they sell it to be geared towards premium products sold in fewer numbers at higher prices. Their high price, low volume approach is actively denying them the advantages that their manufacturing process should be providing them.

And all of this doesn't even deal with a potential mismatch with the desires of the market. GW believes they have discovered a niche group of customers that are primarily collectors who see their miniatures as "jewel like objects of magic and wonder" (as Kirby put it in a previous report). Emails from their investor relations department confirm that they really don't think solid game play is a priority for their customers. They don't seem to think it's about the games, but is actually about the collection of miniatures. And Kirby even bragged about market research being unnecessary in this niche. It's entirely possible that there are weaknesses in their product experience that no one at GW is willing to address. That elements of the complete package approach GW offers isn't really what the market wants and that their chosen niche may not be sufficiently large to justify catering just to them and ignoring those who have other priorities.

At this point GW shouldn't be blaming their own staff and saying that "continuing to grow" is going to depend on their sales managers ability to sell. They should be talking about what plan they have to stop the shrinking revenue and volume. What plan they have to return to growth. The thing is though, such a plan doesn't seem to exist. They seem oddly proud of their failing cash machine that isn't keeping the earnings per share up high enough to sustain the dividends of the last while.

The scariest prospect for GW is the possibility that Kirby and friends are right. That they made the right move by abandoning volume and growth and going after premium pricing and cutting costs. That GW really did hit their peak and nothing could have been done differently and all that's left is to manage the decline into irrelevancy in the larger market. That there's some sort of demographic or cultural shift that makes their products less appealing to the young that is their traditional target market so they have nothing left but to jack up prices and try to squeeze as much cash out of their brands before they shrink even further.

You make a lot of sense here. In fact, going over their data, it appears that they've very skillfully "managed" their finance data to appear more healthy and well-placed than they really are, all things considered. As I mentioned before; however, when I'm looking at investing in a retail company, I also take a look at their inventory data. What I've found with GW is falling inventories that stay on the shelves for a shorter period of time; this tells me that they're attempting to manage sales volume because of how it would affect their other financial numbers. The result is what we've been seeing; under-anticipated demand (because, well, market research is odious apparently), shortages, missed opportunities and overall a self-fulfilling prophecy of reduced sales volume now due to not having sufficient inventory on hand.

People who think that GW will just reprint or produce more of something and it will sell later are wrong, in my opinion, mainly due to the way in which they interact with their customers. Customers have no opportunity to anticipate new or upcoming releases which would build the desire to purchase something you may have missed on release day. Think about it, you go into the store, try to buy something and are told that it's not in stock and no one knows when or if it will be available again; that's a lost sale. The whole thing is mind-boggling.




Automatically Appended Next Post:

 MWHistorian wrote:

And what you're not getting as the WM/H, Malifaux and X-Wing player is usually the same person. So, while they're not being forced to buy stuff by artificial meta churn like GW's crap, they're putting their money in the store just the same. Just this year I bought into WMH, Infinity, X-wing and now Maliefaux. Yeah, not a dollar went to GW, but it did go to the FLGS all the same.

Too right. But the problem with GW is that they're trying to be a FLGS with only two/three products to sell.....the answer is to attempt to make their customers buy more, more often of the same thing.

 agnosto wrote:
(because, well, market research is odious apparently)

"otiose"

(Much like this post, but I couldn't help myself, is it wrong that that's probably the most memorable "educational" thing that's happened to me in the last 12 months.....)

Talys wrote:
Sure thing, call it what you will. If those stores would just ratchet up Lumia, Windows Phone would outsell iPhone! This is terrible logic. If you want to shout: IT IS NOT SOLEY THE INDIVIDUAL STORE'S RESPONSIBILITY TO DRUM UP SALES!!

It is the manufacturer's responsibility to create hype, and create churn. Stores are staffed by low wage earners who aren't the best sales people in the universe. If they were, they'd work for pharmaceutical companies, make six figure salaries, and have company cars and expense accounts. The only person in the store that makes a lot of money is the store owner.

When Microsoft writes Halo, is it Best Buy's job to walk up to everyone and say, "BUY HALO! HALO IS GOOD!"? How about when Xbox One or PS4 are released? Who's job is it to promote it? Who puts up the TV ads? It's squarely on the manufacturer to create hype, because they have the budget to do so. Little wee stores have enough problems, like paying rent, dealing with theft, and making ends meet.

The fact is (and it really is a fact in my area if nowhere else), the WMH crowd buys a lot less stuff (including hobby supplies) per player than the 40k crowd, and the XWing player buys even less. The infinity player, and malifaux players buy little bits of stuff too. That's why when you walk into a store, the front 1/4 of the store is all GW stuff. It sells. Among other things, one problem with WMH being "stable" or whatever you want to call it, there is really nothing left to buy for people who have all their gaming pieces for two or three factions. The new releases are so sparse, in comparison.

More GW paradigm easy-mode thinking. PP has hyped the game. That group is playing, aren't they? They bought it, right? PP made a product, hyped it to these guys, they wanted it, and they bought the product.

Those questions I asked about what the game store is doing to promote sales in my last post are not rhetorical. What is the store doing to sell WM/H to players new and old (but preferably new, so they buy an entire army)?

The downloadable rules sets for leagues and tournaments and the prize packs available with participation patches and actual medals that I mentioned PP makes available? Those are wargaming tools to create hype and interest. That's to get people in the store and playing and other people wanting to play this game where you buy an army and do neat things with it.

Also, as someone else said above: there is no reason the WM/H players can't also be X-Wing, Malifaux, Mantic, and/or Infinity players. Heck, some of them probably are already. Part of the new paradigm is that games that don't keep mugging you for more spending means that you can pick up several. I have. I play the entire list above, but I haven't bought anything GW in over two years, including paints or brushes. It's amazing how much liberty you have to broaden your gaming horizons when you're not pumping everything you can spend on the hobby into keeping yourself in one game you bought years ago. If the WM/H players aren't crossing over games, is the store owner advertising the other games to them and trying to get them to spend more on other stuff? Or is he assuming that WM/H is like GW games, and since these guys are "hooked" the proper course is to wait until they need more for the one game they'll ever play?

Your Halo example is terrible, because it doesn't hold up to comparison with GW product. How does GW promote 40K? Where are the TV ads? No, the GW "hype" isn't hype as you're describing. GW "hype" is artificial: New rulebook says if you want to keep playing the army you've already bought, now you have to buy this, this, and this. The comparison would be like selling you Halo 2 in a store, but then requiring you to buy a subscription every 2 months just to keep playing Halo 2. Not Halo 3 or Halo 4, just if you still want the Halo 2 experience, gimme $65 this month.

Talys wrote:
If the new paradigm of wargaming stores is what you purport it to be, local stores are doomed.

No, local stores that keep trying to sell other wargames like they've been selling GW product (ie, set it on the shelf and GW gamers will eventually *need* to come looking for it) will be doomed if their primary trade is in wargames. Someone's thrown Magic out as an example of churn product, and that's true to a point...but there's also the structured play element. I don't play Magic, but I watch my local store owner and as a DCI event location, WotC gives him all sorts of tournaments, weekly drafts, and pre-release events he's supposed to (and does) run. They give him packets telling him what to do, and he works hard at it, and people keep coming and buying more Magic from the same set, the new set, whatever's out. He runs events for new cards, old cards, and mixed. And he's always on the lookout for new players to sell the game to.

But he's still stuck in the GW wargaming rut. The difference is, most of the new(er) wargaming companies provide the same sort of structured play support as WotC (note that GW does not) but they don't hear about it or get instructions from a trade rep (because the store owner might not have a direct with manufacturer trade account for these other games). A store owner has to take the initiative to research the games he has local interest in (which includes researching his local gamers to find out what there's interest in) and go looking for stuff to do to promote it. But after 10+ years of the GW paradigm of "stock it and we'll force them to come, because that how our stores stay afloat", store managers and owners take a while to wrap their head around needing to do things to promote wargames like they do other games they sell.

Talys wrote:
By the way, you're wrong about untis being outdated. On Boxing Day, nobody bought a Hordes starter box with metal models (old box) marked down to $45. Nobody bought a Trollbloods Scattergunner, with metal models, marked down to $25. Store owner offered them to me for five bucks less than that the next week, but I couldn't bring myself to pull the trigger, because they'd sit in the box for another 10 years before I finally gave them away. There were tons (and I mean *tons*) of PP metal blisters marked down way below half price that people passed on. Yet, at the end of it all, every single playable 40k model (well-discounted) was sold. I'm talking, every drop pod, every Rhino, predator, Hydra, troops of every faction, box sets, Tyrants, stormravens, and even most of the factioned terminators. The only stuff left was junk that has no value other than for modelling, and terrain/fortification, which never sells well.

First off, the only thing that might be out of date with those metals is there *might* be MK1 cards in the boxes/blisters instead of MK2. Did you know you can tell PP that you got MK1 cards in a product and they'll send you MK2 cards to replace them? Does your store owner know that?

By the rules of WM/H, there's no difference between those metal models and any newer, plastic replacements they *might* have beyond *maybe* new sculpt aesthetics (though many plastic reboxes are the same sculpt transferred to new materials.) There's nothing outdated about them. They are completely usable in modern, MK2 WM/H. Did you know that? Did your store owner? And if he didn't, why wouldn't he? He needs to know, and he needs to be telling everyone about that.

The main thing your example here tells me is that the store owner hasn't done much to actively try and move his WM/H stock for about 3-4 years - except stock it and wait for a customer who already knows what he wants to walk into the store and buy it. He's thinking that its going to sell itself. Next time you go in, why not suggest he bust open two of the metal starter sets, check to see what MK cards are in there, get them replaced if need be, and then ask one of the regulars to show him how to play well enough to run demos? Then he can try demoing it and maybe selling some of the game to people who haven't already bought the game - the fertile, target market. Tell him to call up PP, or email them, and ask them for help/advice in getting new sales drummed up. I bet they'll do what they can for him. They're not GW...they're nice.

The new wargames paradigm is that store owners will have to do a bit of market research and be more proactive than with GW's product. Because GW's product is designed to churn an existing customer until they burn out. This combined with high prices is why the GW stuff was why GW product on sale disappeared. GW is taxing their gamers' dollars so hard just to keep play, they have to take advantage of any price break they can. But those WM/H players have hobby money to spare, because it sounds like most of them are done with their armies. The store owner needs to stop thinking of them as WM/H customers. They've bought in, and they're players. They have armies that have been just fine for years and probably will for years to come. WM/H customers are people who don't own already. It does, indeed, take time to wrap one's head around this, because the standard for the last 10-15 years being that a GW gamer is also a customer, because the won't let you just pay then play, you have to pay to keep playing. No, the WM/H players are potential customers for other games. If he wants their hobby money (which is probably going to non-wargame hobby's at the moment) he needs to try and get them hooked on X-Wing or Deadzone or something else that's different enough from WM/H to be interesting.

By the way, I'm not just lecturing here. I am making real suggestions for your game store owner in these posts. These things been helping mine. It's a slow and ongoing process, but we're shaking him out of GW-thought for wargames...which is good, because his GW sales are steadily declining. I have no problem with you sharing what I'm typing here with him and I wish you would. I want to see wargaming thrive in FLGS after the decline of GW dominance. It's just going to require a little more pro-activity on the parts of stores.

I have to agree with Psychopomp on one thing, at the least. In our area, the majority of WM/H players play several other systems, too. Many of them play Infiniti. There are lots who play either/both Attack Wing or X-wing. In our area where CMON is based, a good number play Dark Age. There's a good sized group of Dropzone Commander players.

Conversely, most of the 40K players only play 40K.

OT: Honestly, I don't feel that anyone who has been paying attention to GW's financial performance over the last 4-5 years is really surprised by this current report.

As a side note, whatever happened to Derekatkinson? He used to be all over threads like this defending GW's financial statements as not being representative of a company making poor choices.

 Baragash wrote:

 agnosto wrote:
(because, well, market research is odious apparently)

"otiose"

(Much like this post, but I couldn't help myself, is it wrong that that's probably the most memorable "educational" thing that's happened to me in the last 12 months.....)

Sure, he used "otiose" but I still think he means "odious" from the way that they treat the concept.




Did I sufficiently cover my mistake?

Saldiven wrote:
I have to agree with Psychopomp on one thing, at the least. In our area, the majority of WM/H players play several other systems, too. Many of them play Infiniti. There are lots who play either/both Attack Wing or X-wing. In our area where CMON is based, a good number play Dark Age. There's a good sized group of Dropzone Commander players.

Conversely, most of the 40K players only play 40K.

OT: Honestly, I don't feel that anyone who has been paying attention to GW's financial performance over the last 4-5 years is really surprised by this current report.

As a side note, whatever happened to Derekatkinson? He used to be all over threads like this defending GW's financial statements as not being representative of a company making poor choices.

It probably got too hard to argue with facts and data.

I see the same trend at my gaming store too. In the last year I've bought into Infinity in a big way, Warmachine and Bolt Action. All of that money has gone to the store and Infinity and Warmachine have really taken off. Picking through the GW shelves you realize how hard it is to stock the majority of the range (particularly fantasy). When the Wood Elf book dropped I went into the store ready to buy several boxes of the Wildwood Rangers and some of the new cavalry - none were available. I asked the staff and they were only allocated a few boxes. Did I run off to the nearest GW store or GW's webstore? Nah, I just bought some more Infinity because it was right there in front of me.

Saldiven wrote:


As a side note, whatever happened to Derekatkinson? He used to be all over threads like this defending GW's financial statements as not being representative of a company making poor choices.

As with all things Internet, he's likely disappeared rather than try and justify things that he's now fairly clearly been shown to be totally wrong on.

Although I personally find that infinitely preferable to the pages and pages of goalpost moving and reality distortion we'd likely have to suffer through if he were still posting!

 Dendarien wrote:

Saldiven wrote:
I have to agree with Psychopomp on one thing, at the least. In our area, the majority of WM/H players play several other systems, too. Many of them play Infiniti. There are lots who play either/both Attack Wing or X-wing. In our area where CMON is based, a good number play Dark Age. There's a good sized group of Dropzone Commander players.

Conversely, most of the 40K players only play 40K.

OT: Honestly, I don't feel that anyone who has been paying attention to GW's financial performance over the last 4-5 years is really surprised by this current report.

As a side note, whatever happened to Derekatkinson? He used to be all over threads like this defending GW's financial statements as not being representative of a company making poor choices.

It probably got too hard to argue with facts and data.

I see the same trend at my gaming store too. In the last year I've bought into Infinity in a big way, Warmachine and Bolt Action. All of that money has gone to the store and Infinity and Warmachine have really taken off. Picking through the GW shelves you realize how hard it is to stock the majority of the range (particularly fantasy). When the Wood Elf book dropped I went into the store ready to buy several boxes of the Wildwood Rangers and some of the new cavalry - none were available. I asked the staff and they were only allocated a few boxes. Did I run off to the nearest GW store or GW's webstore? Nah, I just bought some more Infinity because it was right there in front of me.

That and he probably realized how stupid he sounded by continuing to say things like the financials sucked because goat herders in Lithuania were bullish on Transylvanian wheat or some other nonsense.

This:

I asked the staff and they were only allocated a few boxes. Did I run off to the nearest GW store or GW's webstore? Nah, I just bought some more Infinity because it was right there in front of me.

Was my point earlier. The whole, "We're super-exclusive" attitude that GW's developed while actually just failing to properly manage their inventories has resulted in a great deal of lost revenue.

 agnosto wrote:

 Dendarien wrote:

Saldiven wrote:
I have to agree with Psychopomp on one thing, at the least. In our area, the majority of WM/H players play several other systems, too. Many of them play Infiniti. There are lots who play either/both Attack Wing or X-wing. In our area where CMON is based, a good number play Dark Age. There's a good sized group of Dropzone Commander players.

Conversely, most of the 40K players only play 40K.

OT: Honestly, I don't feel that anyone who has been paying attention to GW's financial performance over the last 4-5 years is really surprised by this current report.

As a side note, whatever happened to Derekatkinson? He used to be all over threads like this defending GW's financial statements as not being representative of a company making poor choices.

It probably got too hard to argue with facts and data.

I see the same trend at my gaming store too. In the last year I've bought into Infinity in a big way, Warmachine and Bolt Action. All of that money has gone to the store and Infinity and Warmachine have really taken off. Picking through the GW shelves you realize how hard it is to stock the majority of the range (particularly fantasy). When the Wood Elf book dropped I went into the store ready to buy several boxes of the Wildwood Rangers and some of the new cavalry - none were available. I asked the staff and they were only allocated a few boxes. Did I run off to the nearest GW store or GW's webstore? Nah, I just bought some more Infinity because it was right there in front of me.

That and he probably realized how stupid he sounded by continuing to say things like the financials sucked because goat herders in Lithuania were bullish on Transylvanian wheat or some other nonsense.

This:

I asked the staff and they were only allocated a few boxes. Did I run off to the nearest GW store or GW's webstore? Nah, I just bought some more Infinity because it was right there in front of me.

Was my point earlier. The whole, "We're super-exclusive" attitude that GW's developed while actually just failing to properly manage their inventories has resulted in a great deal of lost revenue.

I feel Games Workshop attitude towards the quality of their rules has also lost them a lot of revenue, at least from players like myself. While the wargaming hobby entails collecting, assembling, painting (and I do enjoy those) at the end of the day, I'm here to play a game. I wouldn't paint models if I didn't play games with them. I love the social aspect of playing with another person face-to-face and the excitement of rolling dice. And while I'm sure there are plenty of veterans who remember poor rules/rules issues from previous editions, the quality of the game has drastically reduced from 5th edition 40k up to now IMHO.

I don't mind spending a lot of money on my hobby, hell I spent 80 dollars on the Infinity rulebook (which is available for free) and that is a lot for just the core rules. The thing is I find good value in the Infinity rulebook because I play the game a lot. GWs rules I do not find much value in for the price they are asking, so I don't buy the books. What happens when I don't buy your rulebooks? I don't play your games and I don't buy your models. If GW really focused on producing a quality ruleset and not handwave away their issues with talk about being "collectables" or "forging the narrative" I would pay the price they are asking. A better ruleset benefits all types from the casuals, to the narrative gamers to the hardcore tournament players and simultaneously all of those players will buy your products.

 Dendarien wrote:
Snip.

GW has a massive disconnect from a not so insignificant amount of there consumer base??

Ya dont say


Honestly i wish they would follow through with there we are the best and our models are the best and our rules are the best attitude. and actually make the best product.
i wouldn't have issues spending monies on it then.

 Psychopomp wrote:
Also, as someone else said above: there is no reason the WM/H players can't also be X-Wing, Malifaux, Mantic, and/or Infinity players. Heck, some of them probably are already. Part of the new paradigm is that games that don't keep mugging you for more spending means that you can pick up several. I have. I play the entire list above, but I haven't bought anything GW in over two years, including paints or brushes. It's amazing how much liberty you have to broaden your gaming horizons when you're not pumping everything you can spend on the hobby into keeping yourself in one game you bought years ago. If the WM/H players aren't crossing over games, is the store owner advertising the other games to them and trying to get them to spend more on other stuff? Or is he assuming that WM/H is like GW games, and since these guys are "hooked" the proper course is to wait until they need more for the one game they'll ever play?

Yep, sure. The problem with this line of thinking is that without a product treadmill, people don't necessarily get invested in a new game. It's much easier to get an existing customer to buy more stuff in something that they're invested in, than to get them hooked onto a new game, or to try something different.

Games that keep mugging me for more spending are good. I'm willing to play multiple games that mug me for money; but I'm not really willing to invest in a game that won't continue to mug me for money. WMH slightly mugs me for money, so I slightly toss them money. Infinity... well... I keep buying the rulebooks? I can't believe they're on v3, I've spent about $500 on the game, painted.. 30 figures? And never found someone to play one game with.

Games that don't keep mugging me for money, I might buy, play a while, and then stick on a shelf and forget about.

 Psychopomp wrote:


Your Halo example is terrible, because it doesn't hold up to comparison with GW product. How does GW promote 40K? Where are the TV ads? No, the GW "hype" isn't hype as you're describing. GW "hype" is artificial: New rulebook says if you want to keep playing the army you've already bought, now you have to buy this, this, and this. The comparison would be like selling you Halo 2 in a store, but then requiring you to buy a subscription every 2 months just to keep playing Halo 2. Not Halo 3 or Halo 4, just if you still want the Halo 2 experience, gimme $65 this month.

You seem to think that it's a retailer's responsibility to promote a product. I strongly disagree, because retailers are terrible at this. Having worked with a hundred plus retailers on their businesses, I can say with certainty that all but the largest retailers our lousy marketers, and the largest retailers, which don't exist in the wargaming industry, largely rely on co-op dollars (where the manufacturer participates in the cost of marketing). In the current business model of the vast majority of retailers, the fact is, store staff have much less training than they should and are generally not really great at selling.

GW does a lot more to promote 40k than PP does to promote WMH, simply with presence. There are GW stores and there are GW video games. Anyone who's played video games has heard of space marines, Eldar and Tyranids. Who exactly has heard of Retribution, Menoth, or Cyrix?

 Psychopomp wrote:


No, local stores that keep trying to sell other wargames like they've been selling GW product (ie, set it on the shelf and GW gamers will eventually *need* to come looking for it) will be doomed if their primary trade is in wargames. Someone's thrown Magic out as an example of churn product, and that's true to a point...but there's also the structured play element. I don't play Magic, but I watch my local store owner and as a DCI event location, WotC gives him all sorts of tournaments, weekly drafts, and pre-release events he's supposed to (and does) run. They give him packets telling him what to do, and he works hard at it, and people keep coming and buying more Magic from the same set, the new set, whatever's out. He runs events for new cards, old cards, and mixed. And he's always on the lookout for new players to sell the game to.

But he's still stuck in the GW wargaming rut. The difference is, most of the new(er) wargaming companies provide the same sort of structured play support as WotC (note that GW does not) but they don't hear about it or get instructions from a trade rep (because the store owner might not have a direct with manufacturer trade account for these other games). A store owner has to take the initiative to research the games he has local interest in (which includes researching his local gamers to find out what there's interest in) and go looking for stuff to do to promote it. But after 10+ years of the GW paradigm of "stock it and we'll force them to come, because that how our stores stay afloat", store managers and owners take a while to wrap their head around needing to do things to promote wargames like they do other games they sell.

Your store owner has the same formula as nearly every other store owner. Stick GW stuff in the front, Magic stuff behind the counter. Make money retail on the GW stuff, buy/trade/sell Magic cards.

You're not going to change that by just wishing the stores were better fronts for competitive play. Competitive play brings them jack for revenue, compared to a nice release of a $100 or $150 item that people will buy multiples of.

Occasionally, you get a store that also has a slurpee machine, a fridge, and some chips and candy. They'll make money selling you food as you play.

Every store also has a bunch of staff, 75% of whom will give you **TERRIBLE** advice, in 75% of the games they stock.

 Psychopomp wrote:

First off, the only thing that might be out of date with those metals is there *might* be MK1 cards in the boxes/blisters instead of MK2. Did you know you can tell PP that you got MK1 cards in a product and they'll send you MK2 cards to replace them? Does your store owner know that?

By the rules of WM/H, there's no difference between those metal models and any newer, plastic replacements they *might* have beyond *maybe* new sculpt aesthetics (though many plastic reboxes are the same sculpt transferred to new materials.) There's nothing outdated about them. They are completely usable in modern, MK2 WM/H. Did you know that? Did your store owner? And if he didn't, why wouldn't he? He needs to know, and he needs to be telling everyone about that.

The main thing your example here tells me is that the store owner hasn't done much to actively try and move his WM/H stock for about 3-4 years - except stock it and wait for a customer who already knows what he wants to walk into the store and buy it. He's thinking that its going to sell itself. Next time you go in, why not suggest he bust open two of the metal starter sets, check to see what MK cards are in there, get them replaced if need be, and then ask one of the regulars to show him how to play well enough to run demos? Then he can try demoing it and maybe selling some of the game to people who haven't already bought the game - the fertile, target market. Tell him to call up PP, or email them, and ask them for help/advice in getting new sales drummed up. I bet they'll do what they can for him. They're not GW...they're nice.

The new wargames paradigm is that store owners will have to do a bit of market research and be more proactive than with GW's product. Because GW's product is designed to churn an existing customer until they burn out. This combined with high prices is why the GW stuff was why GW product on sale disappeared. GW is taxing their gamers' dollars so hard just to keep play, they have to take advantage of any price break they can. But those WM/H players have hobby money to spare, because it sounds like most of them are done with their armies. The store owner needs to stop thinking of them as WM/H customers. They've bought in, and they're players. They have armies that have been just fine for years and probably will for years to come. WM/H customers are people who don't own already. It does, indeed, take time to wrap one's head around this, because the standard for the last 10-15 years being that a GW gamer is also a customer, because the won't let you just pay then play, you have to pay to keep playing. No, the WM/H players are potential customers for other games. If he wants their hobby money (which is probably going to non-wargame hobby's at the moment) he needs to try and get them hooked on X-Wing or Deadzone or something else that's different enough from WM/H to be interesting.

By the way, I'm not just lecturing here. I am making real suggestions for your game store owner in these posts. These things been helping mine. It's a slow and ongoing process, but we're shaking him out of GW-thought for wargames...which is good, because his GW sales are steadily declining. I have no problem with you sharing what I'm typing here with him and I wish you would. I want to see wargaming thrive in FLGS after the decline of GW dominance. It's just going to require a little more pro-activity on the parts of stores.

,

You may not be lecturing, but you're expecting store owners to be something that they're not. My favorite store stocks millions of dollars worth of hobby stuff (no exaggeration). There are almost every brand of hobby paint, airbrushes, almost every currently supported RPG, comics, just about eery PP model, lots of Mantic and DUST, Battletech, and really, pretty much every game discussed on Dakka. They buy and sell most popular TCGs, and most comics, too, as well as historical and scale models (like Revell). It is simply unreasonable to expect them to know more than a little about each product.

By the way, my local store doesn't need help selling stuff. They stock things, have a lot of stock, and people come and buy things. Partly because they have a lot to look at and choose, partly because the price is good.

 Psychopomp wrote:

Spoiler:

Talys wrote:
Sure thing, call it what you will. If those stores would just ratchet up Lumia, Windows Phone would outsell iPhone! This is terrible logic. If you want to shout: IT IS NOT SOLEY THE INDIVIDUAL STORE'S RESPONSIBILITY TO DRUM UP SALES!!

It is the manufacturer's responsibility to create hype, and create churn. Stores are staffed by low wage earners who aren't the best sales people in the universe. If they were, they'd work for pharmaceutical companies, make six figure salaries, and have company cars and expense accounts. The only person in the store that makes a lot of money is the store owner.

When Microsoft writes Halo, is it Best Buy's job to walk up to everyone and say, "BUY HALO! HALO IS GOOD!"? How about when Xbox One or PS4 are released? Who's job is it to promote it? Who puts up the TV ads? It's squarely on the manufacturer to create hype, because they have the budget to do so. Little wee stores have enough problems, like paying rent, dealing with theft, and making ends meet.

The fact is (and it really is a fact in my area if nowhere else), the WMH crowd buys a lot less stuff (including hobby supplies) per player than the 40k crowd, and the XWing player buys even less. The infinity player, and malifaux players buy little bits of stuff too. That's why when you walk into a store, the front 1/4 of the store is all GW stuff. It sells. Among other things, one problem with WMH being "stable" or whatever you want to call it, there is really nothing left to buy for people who have all their gaming pieces for two or three factions. The new releases are so sparse, in comparison.

More GW paradigm easy-mode thinking. PP has hyped the game. That group is playing, aren't they? They bought it, right? PP made a product, hyped it to these guys, they wanted it, and they bought the product.

Those questions I asked about what the game store is doing to promote sales in my last post are not rhetorical. What is the store doing to sell WM/H to players new and old (but preferably new, so they buy an entire army)?

The downloadable rules sets for leagues and tournaments and the prize packs available with participation patches and actual medals that I mentioned PP makes available? Those are wargaming tools to create hype and interest. That's to get people in the store and playing and other people wanting to play this game where you buy an army and do neat things with it.

Also, as someone else said above: there is no reason the WM/H players can't also be X-Wing, Malifaux, Mantic, and/or Infinity players. Heck, some of them probably are already. Part of the new paradigm is that games that don't keep mugging you for more spending means that you can pick up several. I have. I play the entire list above, but I haven't bought anything GW in over two years, including paints or brushes. It's amazing how much liberty you have to broaden your gaming horizons when you're not pumping everything you can spend on the hobby into keeping yourself in one game you bought years ago. If the WM/H players aren't crossing over games, is the store owner advertising the other games to them and trying to get them to spend more on other stuff? Or is he assuming that WM/H is like GW games, and since these guys are "hooked" the proper course is to wait until they need more for the one game they'll ever play?

Your Halo example is terrible, because it doesn't hold up to comparison with GW product. How does GW promote 40K? Where are the TV ads? No, the GW "hype" isn't hype as you're describing. GW "hype" is artificial: New rulebook says if you want to keep playing the army you've already bought, now you have to buy this, this, and this. The comparison would be like selling you Halo 2 in a store, but then requiring you to buy a subscription every 2 months just to keep playing Halo 2. Not Halo 3 or Halo 4, just if you still want the Halo 2 experience, gimme $65 this month.

Talys wrote:
If the new paradigm of wargaming stores is what you purport it to be, local stores are doomed.

No, local stores that keep trying to sell other wargames like they've been selling GW product (ie, set it on the shelf and GW gamers will eventually *need* to come looking for it) will be doomed if their primary trade is in wargames. Someone's thrown Magic out as an example of churn product, and that's true to a point...but there's also the structured play element. I don't play Magic, but I watch my local store owner and as a DCI event location, WotC gives him all sorts of tournaments, weekly drafts, and pre-release events he's supposed to (and does) run. They give him packets telling him what to do, and he works hard at it, and people keep coming and buying more Magic from the same set, the new set, whatever's out. He runs events for new cards, old cards, and mixed. And he's always on the lookout for new players to sell the game to.

But he's still stuck in the GW wargaming rut. The difference is, most of the new(er) wargaming companies provide the same sort of structured play support as WotC (note that GW does not) but they don't hear about it or get instructions from a trade rep (because the store owner might not have a direct with manufacturer trade account for these other games). A store owner has to take the initiative to research the games he has local interest in (which includes researching his local gamers to find out what there's interest in) and go looking for stuff to do to promote it. But after 10+ years of the GW paradigm of "stock it and we'll force them to come, because that how our stores stay afloat", store managers and owners take a while to wrap their head around needing to do things to promote wargames like they do other games they sell.

Talys wrote:
By the way, you're wrong about untis being outdated. On Boxing Day, nobody bought a Hordes starter box with metal models (old box) marked down to $45. Nobody bought a Trollbloods Scattergunner, with metal models, marked down to $25. Store owner offered them to me for five bucks less than that the next week, but I couldn't bring myself to pull the trigger, because they'd sit in the box for another 10 years before I finally gave them away. There were tons (and I mean *tons*) of PP metal blisters marked down way below half price that people passed on. Yet, at the end of it all, every single playable 40k model (well-discounted) was sold. I'm talking, every drop pod, every Rhino, predator, Hydra, troops of every faction, box sets, Tyrants, stormravens, and even most of the factioned terminators. The only stuff left was junk that has no value other than for modelling, and terrain/fortification, which never sells well.

First off, the only thing that might be out of date with those metals is there *might* be MK1 cards in the boxes/blisters instead of MK2. Did you know you can tell PP that you got MK1 cards in a product and they'll send you MK2 cards to replace them? Does your store owner know that?

By the rules of WM/H, there's no difference between those metal models and any newer, plastic replacements they *might* have beyond *maybe* new sculpt aesthetics (though many plastic reboxes are the same sculpt transferred to new materials.) There's nothing outdated about them. They are completely usable in modern, MK2 WM/H. Did you know that? Did your store owner? And if he didn't, why wouldn't he? He needs to know, and he needs to be telling everyone about that.

The main thing your example here tells me is that the store owner hasn't done much to actively try and move his WM/H stock for about 3-4 years - except stock it and wait for a customer who already knows what he wants to walk into the store and buy it. He's thinking that its going to sell itself. Next time you go in, why not suggest he bust open two of the metal starter sets, check to see what MK cards are in there, get them replaced if need be, and then ask one of the regulars to show him how to play well enough to run demos? Then he can try demoing it and maybe selling some of the game to people who haven't already bought the game - the fertile, target market. Tell him to call up PP, or email them, and ask them for help/advice in getting new sales drummed up. I bet they'll do what they can for him. They're not GW...they're nice.

The new wargames paradigm is that store owners will have to do a bit of market research and be more proactive than with GW's product. Because GW's product is designed to churn an existing customer until they burn out. This combined with high prices is why the GW stuff was why GW product on sale disappeared. GW is taxing their gamers' dollars so hard just to keep play, they have to take advantage of any price break they can. But those WM/H players have hobby money to spare, because it sounds like most of them are done with their armies. The store owner needs to stop thinking of them as WM/H customers. They've bought in, and they're players. They have armies that have been just fine for years and probably will for years to come. WM/H customers are people who don't own already. It does, indeed, take time to wrap one's head around this, because the standard for the last 10-15 years being that a GW gamer is also a customer, because the won't let you just pay then play, you have to pay to keep playing. No, the WM/H players are potential customers for other games. If he wants their hobby money (which is probably going to non-wargame hobby's at the moment) he needs to try and get them hooked on X-Wing or Deadzone or something else that's different enough from WM/H to be interesting.

By the way, I'm not just lecturing here. I am making real suggestions for your game store owner in these posts. These things been helping mine. It's a slow and ongoing process, but we're shaking him out of GW-thought for wargames...which is good, because his GW sales are steadily declining. I have no problem with you sharing what I'm typing here with him and I wish you would. I want to see wargaming thrive in FLGS after the decline of GW dominance. It's just going to require a little more pro-activity on the parts of stores.

QFT. This is a very insightful post, and tells it like it is. Store owners (or their paid staff) really need to understand this if they want to make money going forward selling products for the wargaming hobby. Miniatures-based board games are all the rage now as well, just look at the most successful analog games kickstarted in the past three years or so. Look at the popularity and success FFG is enjoying with games like Descent, X-Wing and now the new Imperial Assault. People out there are hungry for this stuff, but you really have to lead the horses to the water....this 'Product will sell itself' mentality you talk about is a thing of the past.

 Fango wrote:
QFT. This is a very insightful post, and tells it like it is. Store owners (or their paid staff) really need to understand this if they want to make money going forward selling products for the wargaming hobby. Miniatures-based board games are all the rage now as well, just look at the most successful analog games kickstarted in the past three years or so. Look at the popularity and success FFG is enjoying with games like Descent, X-Wing and now the new Imperial Assault. People out there are hungry for this stuff, but you really have to lead the horses to the water....this 'Product will sell itself' mentality you talk about is a thing of the past.

You may wish this to be so, but it isn't

Product **will** sell itself. It just has to be there, and be at the lowest price available, locally or online. For the majority of people, proximity, availability, and price trump expertise. Sure, friendly staff is important, but they don't need to know how Templar every new game that comes out.

They sure can't afford to, on their salary.

You guys want stores where you get to bs with the owner, who is a "true gamer" and is your buddy and font of knowledge. All the stores like this eventually shut down, because somewhere nearby, there is a store where the owner is mostly in the back figuring out inventory, sourcing product, and doing boring stuff like bookkeeping. The front is manned by employees who might be great people, but don't earn enough to play **all** the games coming through. They mostly have some GW collection and play a couple of games, and have dabbled in TCGs, but aren't terribly adept at any of the above.

The store is successful not because it knows about the latest Mantic game, but because it's in a hood location, has good prices, and simply stocks every Mantic game (because that's a lot more efficient than actually learning about each one).

This is analogous to the friendly computer store owner who's driven out of business by Newegg and Best Buy. At the end of the day, price, selection, location, and availability (plus some cheesy flyers) are just more important than the knowledgeable awesome guy that you really respect, because although you'd pay him 5% more because he's your buddy, you won't drive through traffic and pay him 20% more. We live in a world that is increasingly commoditized. Wishing it weren't so won't change things.

Talys wrote:@frozenwastes - nice analysis and history lesson

Perhaps my only disagreement with you is in the injection molded plastic. The main reason I love GW models above all others (particularly large ones) is that they are injection molded plastic. They are very consistent, easy to work with, and always fit well.

The only thing I said about injection moulded plastic was that it is a process geared for mass production while GW's retail model is one based on premium pricing and lowered volumes. I don't see how you could have gotten that I don't like the material out of that. My point is that when you make a mould for a new kit for injection moulded plastic, the next sprue you pump out costs next to nothing. The cost (including staff costs and maintenance) is largely up front and the cost of each sprue is tiny. And the more you make, the lower your total cost per sprue is. It's a technology that gives its greatest benefits when you increase the volume you produce rather than decrease it. GW shouldn't be cranking up the price per miniature and putting less in each box because their manufacturing process gives them the best margins when they increase volume rather than decrease it.

It's a mismatch with their pricing strategy. The plastic itself? Great material. If you want to see what a company can do with it when they embrace the mass production element, look at Victrix. They have to outsource a lot of their process, so their up front cost is even higher. And yet, their regular infantry kits are 48 miniatures for £23 (~$35). And when they have a kit they think people might not buy multiples off, they don't drop the model count, but increase it. Their Greek skirmishers box is 56 miniatures for £30 (~$45). And their new Roman and Carthaginian lines are 60 and 62 figures for £30 (~$45). If you like GW's sculptors better, then there's Perry's plastic offerings. 36 figures (or 12 cavalry) for £20 (~$30).

One thing about GW's fictional universes is they have a limited right of exclusivity to produce figures for them. The CHS lawsuit shows this wasn't as rock solid as GW thought though. Either way, if they have a virtual monopoly on 40k miniatures, then perhaps they believe they can engage in monopoly pricing. Maybe they truly believe that no one else can make their "jewel like objects of magic and wonder" and that people would never choose to go for some other fictional universe or historicals as a substitute. And if the customer does, then they can just engage in the "no true scotsman" fallacy and declare that person never really was their true target customer.

Torga_DW wrote:
I agree with the above, but what is scariest to me is that they have no way of knowing because they don't care about market research. Kirby sits in front of his computer once a year and writes a page or two of barking mad and that's their source of market information. "Nothing left to do but jack up prices" seems to have been their number one plan, and their fallback plan. How can a business grow when they don't know what made them successful in the first place?

My current theory is that GW was largely in the right place at the right time to take advantage of a demographic shift (children of the babyboomers hitting their teenage years in the 90s) and an existing hobby distribution system (RPG, comic book and hobby stores from the late 80s into the 90s) to become an international company. Then they got the LOTR license and outsourced the marketing to DiAgostini and relied on crossover interest from movie goers to make the most money they ever made. Since then they've been floundering. And given their lack of plan to stop shrinking and no lucky demographic shift coming to give them another boost, it looks like their future is to continue on this slow decline. They could reinvest in growth. They could develop a product line that works great in all sales channels and get DiAgostini to market it with a "Battle Games in the Dark Millennium" magazine, but they won't. They only seem to want to reinvest in cost savings and window dressing.

agnosto wrote:People who think that GW will just reprint or produce more of something and it will sell later are wrong, in my opinion, mainly due to the way in which they interact with their customers. Customers have no opportunity to anticipate new or upcoming releases which would build the desire to purchase something you may have missed on release day. Think about it, you go into the store, try to buy something and are told that it's not in stock and no one knows when or if it will be available again; that's a lost sale. The whole thing is mind-boggling.

It's also self reinforcing. If they make less product because previous sales indicate they should be conservative on a particular kit or book and then there's surprise demand and they reprint another batch, the sales they lost from the first batch running out won't necessarily be there. People will have moved on in their desires, perhaps prefering to purchase the release of this week rather than the kit or book they missed from a previous week. Then they have a data point that says that reprinting didn't work and left them with dead stock.

It's one thing to have declining volume and have 80-90% of what you made sell out, but to only make 75% of the demand in the first place is definitely leaving money on the table. I think that's a very interesting thing you've pointed out.

ORicK wrote:
Commercially a company that breaks even is good enough.

lol - tell that to an investor - it will get you far

@frozenwastes -

I don't think I misunderstood or even disagreed with what you said about injection molded plastic. I just meant that I am now willing to may *more* for injection molded plastic, especially on large miniatures (which will also be smaller run).

So, even though their setup costs are higher (you're right) there is value beyond being able to pump out larger batches cheaply (my point).

Talys wrote:
@frozenwastes - nice analysis and history lesson

Perhaps my only disagreement with you is in the injection molded plastic. The main reason I love GW models above all others (particularly large ones) is that they are injection molded plastic. They are very consistent, easy to work with, and always fit well.

...
...

Clearly you haven't ever assembled a Tau Crisis Suit model.

GW by 2009 had got to the level of quality that Frog models reached in the early 1950s. They are now about where Airfix were in the early 1970s. GW plastic kits are a sad joke compared to nearly anyone other company's inside or outside the wargaming world.

Talys wrote:

By the way, my local store doesn't need help selling stuff. They stock things, have a lot of stock, and people come and buy things. Partly because they have a lot to look at and choose, partly because the price is good.

Except, apparently, WM/H.

If the above is true, then your store is very lucky in that it can just stock merchandise and wait for people to come, like they were a big box store. But I bet they could be doing much better if the retailer actually retailed in addition to being a stockist. That kind of luck's not going to hold out forever. GW is choking itself out, and one of its flailing methods to try and save itself is to start trying harder and harder to divert your store's customers to their online or physical store.

You compared your local store (again) to Best Buy, but they're NOT a big box store - the closest way that comparison is valid is if maybe they're one of the rare large gaming stores. And if that's the case, then they're an outlier (and its even WORSE that they're not promoting their own sales of product with events and demos). Otherwise, they ARE the neighborhood computer store and should be scrambling for every sale they can get, even if sitting around waiting for customers to sell themselves stock is getting them by okay. The best store owners are the sort that know their bookkeeping AND their product, and try to actively encourage or close sales rather than just waiting for the fortune of stock jumping into a customer's hands of its own volition.

Lovepug13 wrote:

ORicK wrote:
Commercially a company that breaks even is good enough.

lol - tell that to an investor - it will get you far

Investors buy equities for all sorts of reasons. Buying a stock of a company making a lot of money is actually quite hard to profit from, because everyone else is doing it too, and the profits are built into the stock price.

Ideally, you want to invest in a company that is doing not spectacularly at present, but will do spectacularly in the future. Even better if everyone else thinks it's a lost cause (and they're wrong).


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 Psychopomp wrote:

Talys wrote:

By the way, my local store doesn't need help selling stuff. They stock things, have a lot of stock, and people come and buy things. Partly because they have a lot to look at and choose, partly because the price is good.

Except, apparently, WM/H.

If the above is true, then your store is very lucky in that it can just stock merchandise and wait for people to come, like they were a big box store. But I bet they could be doing much better if the retailer actually retailed in addition to being a stockist. That kind of luck's not going to hold out forever. GW is choking itself out, and one of its flailing methods to try and save itself is to start trying harder and harder to divert your store's customers to their online or physical store.

You compared your local store (again) to Best Buy, but they're NOT a big box store - the closest way that comparison is valid is if maybe they're one of the rare large gaming stores. And if that's the case, then they're an outlier (and its even WORSE that they're not promoting their own sales of product with events and demos). Otherwise, they ARE the neighborhood computer store and should be scrambling for every sale they can get, even if sitting around waiting for customers to sell themselves stock is getting them by okay. The best store owners are the sort that know their bookkeeping AND their product, and try to actively encourage or close sales rather than just waiting for the fortune of stock jumping into a customer's hands of its own volition.

What you're describing just isn't possible because my guy would have to then work 150 hours a week. The store is always staffed with at least 3 or 4 people (other than the owner, who is usually there, but in the office). They are never standing around, and the till always has a line. It's a healthy business. Yes, it is a big store, but it didn't start out that way (it grew over time).

An acquaintance of mine tried to open a store as you describe, and he is an excellent guy, but the store shut down after two years. He was a great gamer, extremely knowledgeable and the nicest guy, but just not the best businessperson, and not focused enough on pricing and availability. Ironically he was a massive PP fan, but that really has nothing to do with the store's success (or lack thereof).

Talys wrote:So, even though their setup costs are higher (you're right) there is value beyond being able to pump out larger batches cheaply (my point).

So you get the benefit of the material and then you still have to figure out what to sell the kit at and how many to make. Big kits, small kit, huge multisprue kit... it doesn't matter. They all still have the same issue-- the average cost per sprue goes down the more you make.

And ...

Kilkrazy wrote:
GW by 2009 had got to the level of quality that Frog models reached in the early 1950s. They are now about where Airfix were in the early 1970s. GW plastic kits are a sad joke compared to nearly anyone other company's inside or outside the wargaming world.

Pretty much. I remember the first time I opened a higher end Bandai model kit. I didn't know just how bad GW's were until I had experienced a truly great kit. The thing had different coloured plastic on the same sprue so it was easy to tell the parts apart (and to allow for it to be built without painting for those so inclined), it had shapes that just weren't possible on a GW sprue because the mould was multipart in way I don't quite understand. There were even different hardnesses of plastic on the same sprue so the small parts would be more robust. And the engineering of the kit itself was crazy. You had an under-chasis and then put on armour plates and whatnot.


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Talys wrote:Investors buy equities for all sorts of reasons.

Yes, and right now GW is presenting itself as a dividend machine.

Traditionally when companies finish a growth phase and their revenues stabilize, they end up switching to a business model where they figure out the best way to operate, make the most money possible and use that money to buy out the competition, reinvest in R&D, buy back shares or pay dividends. They mature into an established company with a consistent business model that produces consistent results.

GW is acting like they are in that stage. They are peddling themselves to the investors as "an efficient cash generating machine" but it's not working. Look at the inconsistent dividend payments. Inconsistent revenue and falling profit. They are failing at their own stated goal for their company.

It is true that companies don't have to keep growing forever, but when they stop, there are certain things investors expect of them as they transition into a mature and established company. GW never went through that transition. Instead they were growing until the LOTR floor fell out from under them and then they scrambled to cut costs and then started cranking out dividends without a consistent revenue base to support it. And their pay out ratio has not been sustainable. A sustainable dividend and reinvestment policy is another sign of a company that has ended their growth phase and matured into an established, consistent enterprise. GW doesn't have that either.



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Talys wrote:What you're describing just isn't possible because my guy would have to then work 150 hours a week. The store is always staffed with at least 3 or 4 people (other than the owner, who is usually there, but in the office). They are never standing around, and the till always has a line. It's a healthy business. Yes, it is a big store, but it didn't start out that way (it grew over time).

Actually it sounds like they are already doing it. That they have a large active staff that is engaged with the customer and selling the product.

I'm willing to be the store does have things like organized play and whatnot for a variety of their product lines. Do they do Friday Night Magic? Any of FFG's organized play? Board game nights? That sort of thing? I bet they do.

It sounds like the store you describe is already actively retailing their product and not relying on the manufacturer to do the selling for them.




.

ORicK wrote:
Commercially a company that breaks even is good enough.

No, it's not.

If all you are doing is breaking even, one down year means the business closes.

I work for a "not for profit" company, but we still have to operate as far in the black as possible. When the economic downturn hit, we operated fully in the red for almost three years. If we had only been breaking even prior to that, we would have closed shop after the first year. However, since we had significant cash reserves and investments from previous years, we were able to survive to be in business today.


Automatically Appended Next Post:

 Kilkrazy wrote:

Talys wrote:
@frozenwastes - nice analysis and history lesson

Perhaps my only disagreement with you is in the injection molded plastic. The main reason I love GW models above all others (particularly large ones) is that they are injection molded plastic. They are very consistent, easy to work with, and always fit well.

...
...

Clearly you haven't ever assembled a Tau Crisis Suit model.

GW by 2009 had got to the level of quality that Frog models reached in the early 1950s. They are now about where Airfix were in the early 1970s. GW plastic kits are a sad joke compared to nearly anyone other company's inside or outside the wargaming world.

GW still hasn't reached the level of quality that the Gundam models had in the 1980's. I remember being able to build fully functioning transforming models back then.

You also have to keep in mind that stores can fail when there's oversaturation of their market. Back in 2011 where i live, there were 4 stores that i knew of stocking gw. The problem was the customer base wasn't large enough for all of them to compete with each other and with gw. In that situation, there simply wasn't enough market to support 4 indies competing with each other no matter what the owners did or how good they were in any respective field (running the business, customer service, etc). And that's before you have to run the gw prices & trade terms minefield which makes it difficult to make an actual profit off carrying their lines. Selling expensive cheap plastic kits that are trying to rival new cars in expenditure is never going to be easy.

 frozenwastes wrote:

Talys wrote:So, even though their setup costs are higher (you're right) there is value beyond being able to pump out larger batches cheaply (my point).

So you get the benefit of the material and then you still have to figure out what to sell the kit at and how many to make. Big kits, small kit, huge multisprue kit... it doesn't matter. They all still have the same issue-- the average cost per sprue goes down the more you make.

And ...

Kilkrazy wrote:
GW by 2009 had got to the level of quality that Frog models reached in the early 1950s. They are now about where Airfix were in the early 1970s. GW plastic kits are a sad joke compared to nearly anyone other company's inside or outside the wargaming world.

Pretty much. I remember the first time I opened a higher end Bandai model kit. I didn't know just how bad GW's were until I had experienced a truly great kit. The thing had different coloured plastic on the same sprue so it was easy to tell the parts apart (and to allow for it to be built without painting for those so inclined), it had shapes that just weren't possible on a GW sprue because the mould was multipart in way I don't quite understand. There were even different hardnesses of plastic on the same sprue so the small parts would be more robust. And the engineering of the kit itself was crazy. You had an under-chasis and then put on armour plates and whatnot.


Automatically Appended Next Post:

Talys wrote:Investors buy equities for all sorts of reasons.

Yes, and right now GW is presenting itself as a dividend machine.

Traditionally when companies finish a growth phase and their revenues stabilize, they end up switching to a business model where they figure out the best way to operate, make the most money possible and use that money to buy out the competition, reinvest in R&D, buy back shares or pay dividends. They mature into an established company with a consistent business model that produces consistent results.

GW is acting like they are in that stage. They are peddling themselves to the investors as "an efficient cash generating machine" but it's not working. Look at the inconsistent dividend payments. Inconsistent revenue and falling profit. They are failing at their own stated goal for their company.

It is true that companies don't have to keep growing forever, but when they stop, there are certain things investors expect of them as they transition into a mature and established company. GW never went through that transition. Instead they were growing until the LOTR floor fell out from under them and then they scrambled to cut costs and then started cranking out dividends without a consistent revenue base to support it. And their pay out ratio has not been sustainable. A sustainable dividend and reinvestment policy is another sign of a company that has ended their growth phase and matured into an established, consistent enterprise. GW doesn't have that either.



Automatically Appended Next Post:

Talys wrote:What you're describing just isn't possible because my guy would have to then work 150 hours a week. The store is always staffed with at least 3 or 4 people (other than the owner, who is usually there, but in the office). They are never standing around, and the till always has a line. It's a healthy business. Yes, it is a big store, but it didn't start out that way (it grew over time).

Actually it sounds like they are already doing it. That they have a large active staff that is engaged with the customer and selling the product.

I'm willing to be the store does have things like organized play and whatnot for a variety of their product lines. Do they do Friday Night Magic? Any of FFG's organized play? Board game nights? That sort of thing? I bet they do.

It sounds like the store you describe is already actively retailing their product and not relying on the manufacturer to do the selling for them.




.

If the store he's talking about is my LFGS Meeplemart, then yes they actively promote their products very much so. They're currently the largest online retailer in the world, just having nudged Wayland out in terms of number of products carried. they have a large online presence, days broken up into different miniature ranges for ease of finding people to play, lots of tournaments for miniatures and magic. the list goes on.

@frozenwastes --

Of course the store has designated game nights on a calendar. EVERY store has this. However, unless you count selling grossly overpriced food (no outside food or drink allowed), there is zero staff participation.

In the store, staff mostly help people who are buying gifts who are clueless, and they give terrible advice. Like, they will show a DV and a Warmachines box as viable starter games for a gift, and 9/10 people will choose the DV box because it has more models, templates and dice and is in a bigger box. Nibosy explains the difference in the games at all.

If you ask about WMH (which has reasonable prominence) the most you'll get is, oh Cyrix is really popular, but I don't play it. If you ask about 40k factions you'll end up with an unplayable list. If you ask about airbrushes, you'll end up with a siphon fed thing that could paint a motorcycle. Just
.. Bad advice. And, they'll even come out and say they can't afford to play most of the stuff they sell.

Edit: Case in point, they sold me on the new infinity starter box by telling me it was a great value because it came with 3rd ed rules. Well, it doesn't come with the full rule set; I still had to buy the core rules, and now I have a bunch of duplicate models. Of course, I could return it, but, bah. I chalk it up to honest mistakes rather than any ill intent.


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My thought is that people go into a store wanting to spend money. So, the mist important thing for a store to have is product the person might be interested in, at a good price. Obviously, being able to get them there (location) is awfully important too.

I think being nice is important, bit being able to give product advice? I think in this day and age, people research that themselves, largely -- or suffer for it.

Talys wrote:
@frozenwastes --

Of course the store has designated game nights on a calendar. EVERY store has this. However, unless you count selling grossly overpriced food (no outside food or drink allowed), there is zero staff participation.

In the store, staff mostly help people who are buying gifts who are clueless, and they give terrible advice. Like, they will show a DV and a Warmachines box as viable starter games for a gift, and 9/10 people will choose the DV box because it has more models, templates and dice and is in a bigger box. Nibosy explains the difference in the games at all.

If you ask about WMH (which has reasonable prominence) the most you'll get is, oh Cyrix is really popular, but I don't play it. If you ask about 40k factions you'll end up with an unplayable list. If you ask about airbrushes, you'll end up with a siphon fed thing that could paint a motorcycle. Just
.. Bad advice. And, they'll even come out and say they can't afford to play most of the stuff they sell.

Edit: Case in point, they sold me on the new infinity starter box by telling me it was a great value because it came with 3rd ed rules. Well, it doesn't come with the full rule set; I still had to buy the core rules, and now I have a bunch of duplicate models. Of course, I could return it, but, bah. I chalk it up to honest mistakes rather than any ill intent.

Your store sounds pretty special. I'm glad you're using it as a basis for every other store around.
Also, you didn't have to buy the 3rd edition rules. They're free online.
My store's more like what the others have said. WMH players have several games and the store owners push demo games and leagues to get new players in. We just finished a WMH leage and several people (including new players) bought some stuff to fill in gaps in their lists. (not to mention paints and supplies to finish their armies.)

And one more thing....you actually want a game to continue fleecing you and forcing you to buy stuff instead of buying what you want when you want? I guess customers get the game they deserve.